The Influence of Firm's Human Resource andMarket Demand on a Firm's Innovation Strategy

Abstract: Background: In technology based industries, firms which originate from advanced economies have traditionally occupied the leading position. In order to keep that position, they relied on strong efforts devoted to research and development, striving for being at the cutting edge of technology. During the last decade, we observed that some change happened amongst the top ranking of firms within the telecommunication industry with the apparition of Huawei, which originates from China, an emerging economy, in second position. Aim: This research is aimed to investigate the influence of firm’s human resource and market demand on firm’s innovation strategy. Definitions: Human resource represents the employees working for a company. In our study, when we mention human resource we deal with employees working in research and development. Market demand refers to the products which are demanded on a specific market. For our research we divided it in three categories: less advanced, advanced and most advanced products. Innovation strategy deals with the way a firm organizes its research and development in order to innovate according to either, in our research, new-tofirm or new-to-world innovation strategy. Completion and results: This study revealed that Huawei managed to adjust its innovation strategy in accordance with its human resources and market demand. Thanks to an efficient and adapted innovation strategy, Huawei now manages to perform better than its main competitor Ericsson, not only on developing or emerging markets, but also in advanced markets. We also observed the role of rules and regulations and cooperation, without which Huawei would not have been able to lead an efficient new-to-firm strategy. We created a model which is designed to give a better understanding of the situation and illustrate the interrelation between human resource, market demand, innovation strategy and performance.